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This document discusses a back-to-basics approach to maintenance, repair, and operations (MRO) for utilities that can significantly reduce costs and risks. It recommends optimizing MRO activities by establishing preventative maintenance programs based on equipment criticality and failure analysis. It also recommends optimizing inventory by regularly analyzing reorder parameters to reduce excess inventory and stockouts. Adopting these basic practices and analytics can help utilities establish more cost-effective maintenance strategies while sustaining operational excellence.
This document discusses a back-to-basics approach to maintenance, repair, and operations (MRO) for utilities that can significantly reduce costs and risks. It recommends optimizing MRO activities by establishing preventative maintenance programs based on equipment criticality and failure analysis. It also recommends optimizing inventory by regularly analyzing reorder parameters to reduce excess inventory and stockouts. Adopting these basic practices and analytics can help utilities establish more cost-effective maintenance strategies while sustaining operational excellence.
This document discusses a back-to-basics approach to maintenance, repair, and operations (MRO) for utilities that can significantly reduce costs and risks. It recommends optimizing MRO activities by establishing preventative maintenance programs based on equipment criticality and failure analysis. It also recommends optimizing inventory by regularly analyzing reorder parameters to reduce excess inventory and stockouts. Adopting these basic practices and analytics can help utilities establish more cost-effective maintenance strategies while sustaining operational excellence.
Level 5, 16 Marie Street PO Box 1119 Brisbane QLD 4064 E: salesteam@oniqua.com W: www.oniqua.com
B a c k
t o
B a s i c s
A p p r o a c h
t o
M a i n t e n a n c e ,
R e p a i r
a n d
O p e r a t i o n s
( M R O )
FOR UTILITIES, A BACK TO BASICS APPROACH TO MAINTENANCE, REPAIR AND OPERATION (MRO) CAN SIGNIFICANTLY REDUCE COST AND RISK
Author: Steve Pak Senior Consultant, Oniqua Date: 2012
Oniqua Pty Ltd (C) 2012 T: +61 7 3369 5506 (APAC) T: +1 303 222 1100 (North America) Level 5, 16 Marie Street PO Box 1119 Brisbane QLD 4064 E: salesteam@oniqua.com W: www.oniqua.com With todays increased regulations and the pressure to sustain profitability, maintenance operations within Utilities organizations must be nothing short of world class. Faced with enormous challenges, maintenance organizations generally embark on a reliability-centered maintenance (RCM) approach, combined with failure mode effect analysis (FMEA) to achieve its goals. But the high volume of assets (equipment) and the materials demand (MRO inventory) make it a daunting task requiring involvement from everyone across the organization. RCM demands significant initial efforts, and even more to sustain it.
Therefore, establishing and instituting best practices into maintenance processes is key to achieving long-term success. Embracing a back-to -basics principle of doing everyday activities well and ceasing all non-value activities will lead to a cost-effective maintenance strategy.
At its core, a cost-effective maintenance strategy addresses the dominant causes of equipment failure. Its a systematic approach to defining a routine maintenance program composed of cost- effective tasks that preserve important functions. By focusing on actions and standardizing the processes, Utilities can quickly drive out waste, maximize time and eliminate non-value activities.
The two elements associated with MRO that must be optimized with Utilities organizations include:
1. Activities such as inspections, measurements, replacements, adjustments and repairs intend to restore a functional unit in order to perform required functions.
2. Materials all supplies used to restore functional units to required conditions.
ACTIVITY OPTIMIZATION
MRO involves two major activities corrective and preventive maintenance.
Corrective maintenance (CM) is often most expensive because failed equipment often leads to downtime, and sometimes requires equipment replacement (replacement value). Therefore, organizations must rely on effective preventive maintenance (PM) programs to maintain equipment and prevent costly failures.
Since it is nearly impossible to maintain all equipment at all times, Utilities need to have a value- driven strategy to determine when to perform preventive maintenance. This can be accomplished by identifying equipment criticality, dominant failure modes and causes, and the consequences of failure. The levels of equipment criticality are then reassigned according to the consequences of failure. Some equipment is not critical and left to "run to failure", while others must necessarily be addressed.
Equipment Criticality per Equipment Consequence of Failure (CoF) Criticality with CoF Process Equipment A 8 10 70 Process Equipment B 8 5 35 Support Equipment C 4 2 8
Table 1 Example of criticality determination, using a 0-10 scale.
Oniqua Pty Ltd (C) 2012 T: +61 7 3369 5506 (APAC) T: +1 303 222 1100 (North America) Level 5, 16 Marie Street PO Box 1119 Brisbane QLD 4064 E: salesteam@oniqua.com W: www.oniqua.com Applying a simple quadrant analysis between criticality of PM activity against its annualized cost, the entire PM activity can quickly be categorized and segmented to determine whether to optimize or to eliminate.
CATEGORY DEFINITION RESOLUTION PM effectiveness measures, utilize Strategic Critical high cost and highly critical FMEA/RCM method PM effectiveness measures, utilize Critical moderate to low cost and highly critical FMEA/RCM method increase PM interval, manage by Excessive high cost and moderate to low critical need/exception eliminate, delegate to lower cost Trivial low cost and low critical resource
The PM activities that are categorized as strategic and critical must address dominant failure causes to prevent failures. Failures caused by unlikely events, unpredictable acts of nature, onetime events, etc. should not be taken into account as a risk.
It is not uncommon to find that most PM activities are unnecessary; in fact, it might even add substantial wear to the equipment. In addition, there is no guarantee that the equipment will continue to work at desired conditions, even if the equipment is maintained according to plan. Therefore, the establishment of PM effectiveness measures as a guide to trigger PM activity optimization is essential for a cost-effective strategy.
PM has some advantages over Condition Based Maintenance (CBM) or Predictive Maintenance (PdM), such as easier planning of activities and materials; costs are distributed more evenly; and no initial costs for instrumentations. However, it also has the disadvantage of being less reliable and more expensive due to more frequent part changes. Therefore, the ideal mix of PM and CBM/PdM is highly desirable.
The determination of which assets that should fall under CBM can also be quickly identified by utilizing a quadrant analysis to determine equipment criticality and the mean-time-between-failures (MTBF). The asset selection is extremely important due to high costs and the significant resource demand associated with CBM.
Oniqua Pty Ltd (C) 2012 T: +61 7 3369 5506 (APAC) T: +1 303 222 1100 (North America) Level 5, 16 Marie Street PO Box 1119 Brisbane QLD 4064 E: salesteam@oniqua.com W: www.oniqua.com
CATEGORY DEFINITION RESOLUTION Candidate critical, frequent breakdown and high breakdown variation apply condition monitoring for PdM Traditional A critical, occasional breakdown and low breakdown PM at fixed interval variation Traditional B non-critical, frequent breakdown and high breakdown variation PM at fixed interval or corrective maintenance
No PM non-critical, occasional breakdown and low breakdown variation corrective maintenance run to failure
The assets categorized as Candidate are ideal for CBM, and will produce the best return-on- investment. The result is a maintenance program that focuses resources on the assets that would cause the most disruption if failed.
MATERIALS OPTIMIZATION
MRO inventory is generally looked upon by many as a storage area for maintenance materials. However, its function is much more than a materials holding place. Its true intent is to provide on- time delivery of the right materials at the lowest cost.
One of the ways to achieve this stated goal is to optimize the reorder parameters (Min/Max or ROP/ROQ) across all inventory items on a regular periodic interval. But many organizations do not have the resources or the knowledge base to carry out the necessary procedures required to correctly balance the dynamics of material demand. Consequently, organizations are forced to carry excessive inventory (surplus & obsolescence), incur frequent expedition costs (freight), and/or experience unacceptable levels of stock out occurrences.
There are a variety of inventory analytical tools that require very little user interface to optimize reorder parameters and significantly lower inventory cost. An analytical tools objective is to gather all pertinent data associated with inventory items and apply algorithms to recommend appropriate reorder parameters across all items in inventory.
Oniqua Pty Ltd (C) 2012 T: +61 7 3369 5506 (APAC) T: +1 303 222 1100 (North America) Level 5, 16 Marie Street PO Box 1119 Brisbane QLD 4064 E: salesteam@oniqua.com W: www.oniqua.com CONCLUSION
The challenges of where and how to trim costs while sustaining or increasing service levels and operational excellence exerts enormous pressure on maintenance operations within todays Utilities organizations. The application of back-to-basic principles, couple with some basic analytics tools, can help mitigate much of the pain associated with this challenge.
A cost-effective maintenance strategy can be established simply by taking a step back and doing the basics well, while at the same time ceasing all non-value activities by focusing on:
understanding that the majority of failures are not linked to the age of an asset;
managing the process of failure instead of asset lifecycle expectancies;
assigning criticality based on equipment impact on productivity and cost of equipment failure;
optimizing PM frequencies and standardizing PM activities based on risk;
managing assets on Condition-Based Maintenance based on certain selection criteria;
optimizing inventory reorder parameters on a periodic basis